Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Canada Competition Bureau announces $13M fine in auto parts bid rigging investigation, (Apr 4, 2016)
Organizations Mentioned:Showa Corporation
By Linda O’Brien, J.D., LL.M.
Showa Corporation, a Japanese manufacturer and supplier of automobile components, pleaded guilty to one count of bid rigging under the Competition Act and was fined CAD $13 million by the Ontario Superior Court of Justice for its participation in an international bid rigging conspiracy, the Canada Competition Bureau announced on April 1.
The Competition Bureau’s investigation found that between October 1, 2007 and April 30, 2008, Showa engaged in a secret illegal arrangement with another supplier of electric power steering (EPS) gears sold to Honda Motor Co., Ltd. for cars manufactured in Canada. EPS gears use an electric motor and an electronic control unit to provide additional power to the steering mechanism.
The Bureau first learned of cartel activity in the motor vehicle components industry through its Immunity Program, after which it began an investigation in December 2009. The investigation also benefited from the cooperation of numerous companies under the Leniency Program. The Bureau’s investigation relates to a series of alleged conspiracies and bid rigging agreements among various suppliers in the sale and supply of components used in the manufacturing of motor vehicles in Canada and elsewhere.
Since April 2013, the Bureau’s investigation involving motor vehicle components has resulted in nine guilty pleas and over CAD $70 million in fines imposed by the courts.
The fine against Showa is the second largest fine ever ordered by a court in Canada for a bid rigging offense. To reduce the likelihood of a subsequent offence being committed, Showa implemented a competition compliance program.
"Bid-rigging leads to higher prices for consumers, reduces the incentive for companies to be innovative and creates a less competitive environment,” said Stéphane Hould, Deputy Commissioner of Competition. “It is toxic behavior that harms the economy and consumers, in Canada and around the world, which is why the Bureau is cracking down on these anti-competitive agreements."
Companies: Showa Corporation
News: Antitrust